Jakarta. Indonesia is considering raising the share of coal that miners must sell domestically to more than 30%, up from the current 25%, as the government moves to cut national production and prioritize domestic energy needs.

Deputy Energy and Mineral Resources Minister Yuliot Tanjung said the domestic market obligation, or DMO, would be adjusted upward if production quotas are reduced. “We are still calculating it. The range could be more than 30%,” Yuliot said on Friday, as quoted by state news agency Antara.

The government has set an indicative coal production target of around 600 million tons for 2026, down roughly 200 million tons from the estimated 800 million tons produced in 2025. The planned cut reflects growing concern in Jakarta that excessive output has contributed to a global oversupply that continues to weigh on prices.

“With lower production the percentage will certainly rise,” Yuliot said. Under existing rules, miners are required to allocate 25% of their annual realized production to the domestic market. 

Coal supplied under the DMO is prioritized for electricity generation — both public and captive power plants — as well as for industrial use as fuel and raw material. In addition to volume requirements, the government also enforces a domestic price obligation, or DPO, capping coal prices for state utility PLN (Persero)’s power plants at $70 (Rp 1.18 million) per ton.

Further strengthening the policy framework, Article 157 of Government Regulation No. 39 of 2025 — an amendment to Regulation No. 96 of 2021 —  coal miners to prioritize domestic demand for minerals and coal before exporting. The rule explicitly covers state-owned enterprises operating in sectors deemed vital to public welfare, including electricity, energy supply, fertilizer production, and other strategic industries.

Indonesia had earlier unveiled plans to slash annual coal output from an estimated 780 million tons to about 600 million tons this year. The country is the dominant player in the seaborne coal market, supplying more than 40% of global trade. Of the roughly 1.3 billion tons of coal traded worldwide each year, Indonesia accounts for about 514 million tons, according to government data.

Coal Export Declines
The production cut comes as Indonesia’s coal exports weakened sharply in 2025 amid softer global demand and prices. Coal exports fell 19.70% last year, with India and China remaining the top buyers, according to the Central Statistics Agency (BPS).

Indonesia recorded $24.48 billion in coal export revenue in 2025, a steep decline from US$30.49 billion in 2024. Export volumes slipped 3.66% to 390.93 million tons from 405.76 million tons a year earlier.

India remained Indonesia’s largest export destination despite reduced purchases. Between January and December 2025, India imported about 100.23 million tons of Indonesian coal worth US$4.98 billion. China ranked second, importing nearly 81.73 million tons valued at US$4.57 billion.

Export values to both markets fell sharply as prices weakened. Shipments to India dropped 20.26% in value from 2024 levels, while exports to China declined 30.24%, underscoring the pressure on Indonesia’s coal sector as the government tightens supply and prioritizes domestic needs.